Yearly business plan - realistic or not? What else should I account for?

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Re: Yearly business plan - realistic or not? What else should I account for?

In looking over some of this I have a question. . . Your boss. . . Is he a commercial beekeeper or sideline? What do you do w/ him? Is he your bekeeping boss or somethingelse? You may have already answered this question, but how long and how many hives do you / have you had? I am only 2 years in beekeeping but I know what it is to have a full time job, wife and three children, and squashed for time this past spring so that I needed to sell one hive because I couldn't make enough woodenware to keep up. Growing your hives was recommended by many I don't remember if that was here or not, but the reason is you then understand what setbacks come at each stage. You can go from 20 and up fairly quickly from what I understand. This year I went from 3 to 8 (If I had equipment ready I would have gone higher) and sold one because it was CRAZY busy on the flow in the spring. Being 19 you have a great opportunity to do what you love with your life. I was told by a guy I went to church with that "a lot can happen in a short ammt. of time" and he was right.

I agree w/ lakebilly about borrowing. Been there done that and don't want the tee shirt again!!!

Ultimately it's your decision. There's so much good advice and so much that I haven't gone through even on this thread. (62 pages or so I haven't gone through yet) Chose wisely. One more thing. . . If you get downwind and problems / setbacks come up you can always adjust your course. That's easier to do by far w/o debt. With debt and other responsibilities it's much harder to change directions. If this is your passion / desire then it can be done as has been said already. ("It's been done already")

Just some food for thought. The answers to the questions that I asked may / hopefully will direct your thoughts also. (If you work as a beekeeper with your boss then you may not "need" to work with another guy, but I'd love to get the experience closer to the field you're interested in.)

Re: Yearly business plan - realistic or not? What else should I account for?

Ryan hardly needs me to speak up for him but lets be fair about what his suggestion was. He was only encouraging him to establish a relationship with a lender. Its pretty difficult to become a viable commercial operation without some sort of relationship with a lender. No you dont want to own your soul to them but a line of credit at your disposal can on occasion be quite helpful and far, far better than carrying a balance on a credit card. I have had many times when a short term advance of a few thousand dollars with the resulting few hundred dollars in deductable interest helped me make many times over that on the other end. Credit in itself isnt a bad thing if it is used responsibly.

"People will generally accept facts as truth only if the facts agree with what they already believe."- Andy Rooney

Re: Yearly business plan - realistic or not? What else should I account for?

Wow, thanks everyone for the help so far. It is a big help to hear all that you have to say. That being said, please feel free to post more thoughts!

Delber, let me answer some of your questions. They may enlighten some of us. My boss retired from his full-time non-beekeeping job 2 years ago, and now does one job: beekeeping. He owns 150 hives, and sells 4-6 tons of honey annually, and also a good bit of beeswax. I have 8 hives of my own, and I have been beekeeping for 3 years, pretty successfully. I had known Terry Booth (now my boss) for a couple of years, and in April 2012, he asked me to work for them at the Cheyenne Honey Company. I started working for him on April 19, 2012. I raised 150 Russian queens, and also have done most of the general hive managment this summer. I also provide alot of needed youthful manpower during harvesting season which is just ending here in WY. He would like to sell me the business, and I would like to buy it. I would much rather buy it when it's small, and expand the business on my own nickel and budget, than to buy it in several years after he has expanded it, and having it cost lot's of $$$$ more. My ultimate goal is to make commercial beekeeping my life career and full-time income. I have very little capital to work with, as I have quite a bit invested in my own hives. It also doesn't help to only have a part time job (1-2 days a week). My only recourse is borrowing, and I'd rather borrow small than big. My only area that lacks general know-how is the migratory aspect of beekeeping. (I'm not saying at all that I know everything about bees; I found out that I didn't 2 years ago!) Anyway, thanks again for everything so far!

Re: Yearly business plan - realistic or not? What else should I account for?

Go get em Ben. Migratory beekeeping is all about moving "far and fast". Start NOW. Enjoy where the ride takes you. Find a place to work bees full time starting Jan 2 if not sooner. I'm guessing CA is your final destination. But any southern state or even HI will do the trick this winter.

Credit is a powerful tool. Learn how to use it and get it BEFORE you need it.

Re: Yearly business plan - realistic or not? What else should I account for?

Re: Yearly business plan - realistic or not? What else should I account for?

Just a couple of thoughts based on my own experience.... when I was in my early 20's and just casually thinking about commmercial beekeeping an older, by the way, Wyoming beekeeper urged me to first off work for three different beekeepers over three years. Interestingly enough he said don't worry about whether or not they're good beekeepers, you can learn as much from a sloppy beekeeper as a profitable one. Although in this day and age there are few "sloppy" beekeepers. I ended up working for only 2 beekeepers and inspecting commercial outfits. Anyway, after a few years working for others and not really sure if beekeeping for a living was a viable option doors just started opening for me and before I knew it I was self-employed. Being single was a huge help. Have only taken out one small loan to buy a 1 ton and a building besides the gentleman's ageement with a sideliner who entrusted me with his 250 hive operation ( I paid him back in honey over 2-3 years). I've said in the past one of the few management decisions I've erred on was not expanding faster. I started out with maybe 300-400 hives and only expanded 100 hives per year. As Ryan suggested getting to 2 loads is a good idea. Take away Ben; work for somebody else; pay attention; and as Ryan says "enjoy the ride." You'll find a commercial guy or two who will be invaluable in taking it to the next level. There's lots of different ways you can make a living with bees; you'll find the path that works for you. I'm a good example of somebody who has done nothing unique or outstanding; just kind of hung in there; worked hard; didn't make any big mistakes ( I made up for that with lots of small ones) and things have worked out better than I ever could have imagined. Just do it and things will fall in place.

Re: Yearly business plan - realistic or not? What else should I account for?

Bill: Nice post from someone who has truly "walked the walk". My experience was considerably different as I ended up taking over management and full ownership of an old family operation in the 1990's that had considerable debt due to low commodity prices, varroa stressed bees and the resulting poor honey crops. It wasn't a fun time, we were in survival mode. 3,000 hives, none of which were on pallets and lots and lots of dead hives and empty equipment left us few options but we did have a willing banker who I couldn't have survived without. I borrowed enough for a used forklift and one good truck capable of pulling it with. We loaded countless truckloads of hives by hand and began the long process of palletizing the operation. Eventually pollination income paid off the notes. A credit line was what I could borrow not what I necessarily chose to borrow. Within a few years our entire outfit was palletized and we were able to eliminate any bee purchases. Since you mentioned being treatment free let me just say it is a laudable goal and one we have made a lot of progress towards but take your cues from the posters here on the commercial forum and not the treatment free forum if you want real life experiences in actually making a living in this business.

"People will generally accept facts as truth only if the facts agree with what they already believe."- Andy Rooney

Re: Yearly business plan - realistic or not? What else should I account for?

Originally Posted by Bill Russell

Just a couple of thoughts based on my own experience.... I'm a good example of somebody who has done nothing unique or outstanding;. .

Very Well said Bill.
My story goes something like this, My older brother whent off to college and asked me (14) to take care of his two hives, four years later I gave him back his two hives and kepted my 100. Things were a bit rough in the beginning, I could remember when I took bees to Nevada alfalfa, packed and ice chest full of food, piched a tent and took shower's in the ditch. It can be done, good luck

Re: Yearly business plan - realistic or not? What else should I account for?

Western -

4 things off the top of my head: 1) Treatment-free beekeeping is local beekeeping, not migratory beekeeping - they are opposites, dump the treatment-free idea all together, especially if you come to California's almond pollination pest / disease / poison warfare factory; 2) add another column to the fuel cost - talk to several truckers who go to the places you are thinking about and ask them about actual road trip costs; 3) I understand you already have 150 hives and are buying 150 more - that is less than half the number most commercial beekeepers keep per employee (count yourself as 1.75 employees - you're the boss), which is more like 700 to 1,000 hives per employee; 4) plan for future cost increases.

A few other reflections - a business plan is a document intended to solicit a loan or investment, nothing more. Writing a business plan and NOT applying for a loan is a good exercise for a business person because it teaches him/her a lot about the business, especially if he/she takes it out of the drawer every 6 months, reads it, connects the dots from projections to performance, and updates it accordingly. The gaps are often quite wide at first. This exercise helps refine his/her forecasting skills - a skill viewed as useful by many people who invest money in businesses.

Business planning is not an essential tool of business - many businesses are built in good conditions, at low cost, with good return on investment, with little regulation, with little competition, and some people have good instincts and can "fly by the seat of their pants" so to speak. Business owners whose interests are not subject to such cushy conditions and who write, review, and revise their biz plans regularly tend to rather emphatically insist that a business plan is indeed essential.

Business management has more to do with buying a business for a ridiculous discount, cutting costs where you can and NOT where you shouldn't, managing time, staying ahead of issues, building and maintaining an efficient and reliable team, paying bills on time, knowing your competition, identifying competitive advantages, working relative strengths, running business ratios, etc., than it does with biz planning.

I'd suggest you take Business 101, Accounting 101, 102, and Managerial Accounting at the local community college if you have not already done so. I'd also suggest you have a friend with an MBA or a S.C.O.R.E. counselor help you review your plan.

Best of all possible luck to you should you decide to buy the business.

Keith - that's not bad work for a guy going from age 14 to age 18! I'd really love to watch you work some day.

Re: Yearly business plan - realistic or not? What else should I account for?

Well, folks, I'm getting the real plan together, going off of a modernized version of the PDF plan afore mentioned. Interesting, but this being my first business transaction/dealing of any sort, I'm dead nervous! I keep telling myself that everything will be fine. I hope it's OK to do that.

KiloCharlie, the 150 described in my outdated signature line is the 8 I own and the 142 (now 150) that I managed for the boss. If I buy him out, I will then own 158 hives. I am treatment-free in my own 8 hives, but that would change as soon as I buy him out and go commercial. I have a good friend who is a trucker (self-owned trucking business), and he owns a big Peterbilt and flatbed; I'll bet he could give me some info on trucking costs.

I have taken or am currently taking Business 101 college courses, and a really good entreprenuership college course that has been a big help to me.

Re: Yearly business plan - realistic or not? What else should I account for?

Coolers? Tents? Showers in ditches? Those are great experiences but the turning 2 hives into 100 is the one I really like. I'm betting it had something to do with a Eureka moment in the pollen sub formulation.

"People will generally accept facts as truth only if the facts agree with what they already believe."- Andy Rooney

Re: Yearly business plan - realistic or not? What else should I account for?

Western -
It sounds like you are on the right path. More experience would help, as would more capital. I'd suggest completing the biz and marketing plans, and seeking other beekeepers with whom to merge and do it as a full "C" or "S" corporation. Talk to an attorney about drafting articles of incorporation.

The risk takers can put down the initial outlay for the making / obtaining of equipment (if they don't already have stuff) and wait the 4 or 5 years while the bee population comes up knowing that there is no hope of a short term return, but a very strong return in the long run. Beekeeper/investors will understand the timetable and not frown too much as investors. You need the truck, the forklift, a honey room, queen rearing capacity to go to 1,000 hives per employee, and probably some nuc production capacity.

Study any potential investor/beekeeper's ethics very carefully - you will getting to know them very, very well. You and these other guys or girls are the ones you will be traveling with, getting stung with, getting in arguments with, eating meals with, making money with, losing money with, and depending on. Get an appointment with a S.C.O.R.E. counselor and have him talk you through startup, even though this a buy-out. You've got a lot of growth to do to make it viable, so treat it as startup.

Meanwhile build the business on it's own merits. Purchase items only on money that the bees earn, and then in order of quickest profitability (R.O.I. rate, or ability to produce cashflow quickly). It is the slow, safe path to grow until you have the loans / investments, it will also give you more capital to bring to the table when you join with others, buying you more ownership percent of the pie.

Remember to keep your enthusiasm for it applied to waking up early and working hard, and to keep a healthy dose of doubt about all business activities. Defensive thinkers often make better businessmen. Again good luck!

Re: Yearly business plan - realistic or not? What else should I account for?

Wow, thanks so much everyone. This has been a big help, eye-opener, and encouragement to me. I am revising and updating my project income/expense statement, and I'll post a one year sample here for more critiqueing. Again, thanks so much guys!

Re: Yearly business plan - realistic or not? What else should I account for?

It it advisable to borrow to buy? I have almost no capital to work with, and the only way is to borrow. But I want to make it clear that I won't borrow if I don't have to, and definitely not more than I will need. My goal is, after the loan is paid off or paid up, to only spend money that the bees make. I don't want to be in debt, but I see no recourse here for awhile. Hopefully I'm making myself clear.

Re: Yearly business plan - realistic or not? What else should I account for?

With no capital at all, you are unlikely to get financing through anyone but the Small Business Administration, www.sba.gov , unless you already have a credit rating.

If you've never used credit, go to several banks in your area and ask about a SECURED CREDIT ACCOUNT. You have to put in $300 to $1,000 in the account, and then borrow against that money CONSERVATIVELY (ask each bank's recommended percentage and stay BELOW it!), buying a pair of pants or shirt or whatever small item each month on the secured credit card AND PAY IT OFF IMMEDIATELY!!!

Stick with one card for 6 months, then add a second one, using it to demonstrate conservative credit use and a perfect record of paying on time. 6 months later, add a third card.

After using a card for 6 to 8 months, request that your bank increase your limit due to your good record. Most will oblige. Most cards will automatically become regular credit cards after one year, but you may need to go to talk to your New Accounts manager at each bank to fill out more paperwork - banks do vary. In this course of action you should have a strong credit rating in 3 years.

Remember - the SOLE PURPOSE of credit card use in the first three years is to establish an excellent rating, not to buy stuff! Paying on time is your new religion! I bring the stamped, addressed envelope with me to do my credit purchase on the same day each month and go straight to the Post Office after purchasing, which sounds fanatical, but it works.

Your other chance is to find a private investor who has a lot of confidence in you. So, you might try to set up that corporation soon in order to buy your boss's business. Try to find other investors with some collateral, capital, or other equity. Your goal is to find some capital of your own to bring to the table first, so you go into the corporation as a principal, not a worker. Do give yourself a job as manager that pays you a salary. You also want to be sure to issue actual certificates of stock-and be sure your's is preferred convertible stock. Talk to a marketing major or a grantwriter or other fundraising / financing wizard about where to hook up with investors. Search the net, using Craigslist, any other site you can think of to shoot a prospectus/biz plan off to potential investors. Finish and polish you Biz plan, you'll be needing it soon. It should more than prove that buying this business is a bargain too good to pass up.

I'd try to stay on with the boss for another year, and get some queen rearing under your belt if you have not been doing so yet. Also, make a point of getting to know all his contacts in his business network. Save every dollar you can, putting it in a separate savings account for buying the business.

Re: Yearly business plan - realistic or not? What else should I account for?

No Capitol? Learn to be a "McIver". Our truck had 5 good cylinders when we bought it for one dollar. The V8 runs fine now, after I rewelded the head and sunk a new valve seat. Find a cheap saw, free wood, make bottom boards, roofs, and innercovers. Minimize expenses from other people doing service work for you. But keep in mind Dirty Harry and "A man has got to know his limitations".